Tag Archives: auto industry

Did Fiat’s Marchionne Ask For A Payoff To Keep Wrangler In Toledo?

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screencap of FCA CEO Sergio Marchionne
Fiat Chrysler CEO Sergio Marchionne

The Wrangler, the best selling nameplate for Jeep, which has been produced in Toledo Ohio for decades, might be produced elsewhere. Fiat Chrysler (FCA) owns Jeep and at the end of last year CEO Sergio Marchionne indicated that it might move Wrangler production due to changes in the model planned for 2017. On Monday, Marchionne pretty much asked for a payoff in order to keep the Wrangler in Toledo.
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New Romney Ad Claims Ohio Doing Poorly But Don’t Tell Governor Kasich

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image of Mitt Romney
Mitt Romney: Don’t look behind the curtain!

Now that the party conventions are over, the meat of the 2012 US Presidential campaign gets underway. Non-stop campaign stops in battle ground states and wall-to-wall advertisements on TV and radio. Except this week here in Ohio. Ads from the Romney campaign have been few and far between. Since the Democratic Convention ended I’ve seen one ad from a pro-Romney super pac and one Romney ad. Picking up where the GOP left off during their convention, the new Romney ad is less than truthful and contradicts Ohio’s Republican Governor John Kasich.
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Bail Outs Revisited

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In previous posts, I have supported bail outs for our banking system and auto makers because of the fried economy. I still think government intervention is a good emergency tool to use to prevent a complete collapse, but because of politics, the bail outs turned out to be a bad idea. It reminds me of a panhandler asking for a couple of bucks to “get something to eat” but you know he or she is just going to use to buy a 40 oz. At some point you have to say no.

I think the factors that play into a decision for government intervention should be based on the national interest. It’s like the old moral situation that if you knew something bad was going to happen and could prevent it, but it might lead to your death, would you still act?

There really is no debate that the economy is a foundation of a peaceable livable society. Look at all the countries that have poor economies – they tend to have bad political and social situations.

The banks need some infusion of cash to keep them open because it might have led to a domino effect – one fails then they take others with them. Part of that is confidence. The reason the Great Depression was so “great” was because of a lack of confidence and government intervention at the time helped restore some confidence.

The auto industry is a different interest based on the number of people employed not only making the cars but those who supply the makers and the subsidiary economy dependent on the industry. For 2 or more of those companies to fail would hurt big time. Probably as bad as the rust belt era of the 1970’s when dozens of steel makers and other heavy industries went bust putting millions out of work.

The problem I see is that once the money came in nobody seemed to work on changing or saving their business. AIG and the banks still paid their bonuses, had their lavish parties, and held on to the money for mergers. The auto makers just kept up their business as usual while Senators and Congress critters insisted that Unions take all the lumps.

So while I still think the bail outs were a good idea – I admit they didn’t work out like they were sold to us. But that’s what happens when you give away money without strings attached.

What should have happened was the large banks and AIG who were failing should have been broken up and those struggling with toxic assets should have had those assets taken off the books at their current value – why should the bank profit from their own bad decision. Bonuses should have been stopped as well as any spending not directly connected to doing their core business – like office redecoration, parties, or lobbying.

Then there would be a follow up with a review and changes, if needed, in government banking regulations to try and prevent this problem from happening again.

The auto makers should have presented a plan about how they will change their product mix and business model to reduce expenses while moving toward more energy efficient cars and trucks, as well as those that use alternative fuels. The goal is moving to a leaner business and one that will be able to compete and contribute to the move off our oil dependency.

It’s not any different than when a person asks for a business loan – you have to show a viable business plan – or you have investors who can kick you to the curb if you endanger their return on their investment through bad decisions.

Tough Love for Auto Makers but not for the Banks

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On Monday President Obama basically threw two of the three US auto makers under a bus when he announced that GM and Chrysler were at the end of their credit line from the US Treasury. It just seemed off to me that the Wall Street con-men who fried the economy, still got billions in bonuses, and whose CEOs hardly got shoved around, got better treatment than the auto makers. Maybe I am not understanding this “tough love” concept I keep hearing about.

I do understand that there needs to be a systematic change in how the auto makers operate as a condition for help but I also believe there needs to be the same kind of changes to the banking industry that actually got us into this mess – like a return to some form of The Glass-Steagall Act and reform in the bank regulatory agencies to enforce existing laws. Also the leadership of the banks that approved the actions that led to the bust should be removed and in some cases the bad banks and AIG need to be wind down and broken up.

Instead we get the removal of the GM CEO and calls for Unions to trash their contracts in an effort to reduce their wages to the same level as workers at foreign owned factories in the US. GM was given 60 days to change and Chrysler was given 30 days to merge with another company.

I just don’t see the fairness of the treatment and yes I know the businesses aren’t the same, but seems to me to be like the guy who held and fired the gun is getting a special deal while the guy driving the get away car is getting the death sentence.

I subscribe to the John Rawls concept of justice – “According to Rawls, ignorance of these details about oneself will lead to principles that are fair to all. If an individual does not know how he will end up in his own conceived society, he is likely not going to privilege any one class of people, but rather develop a scheme of justice that treats all fairly.”

As Eugene Robinson wrote in his column:

Both the credit crunch and the reluctance of consumers to spend what money they have left are the direct result of Wall Street’s atrocious misbehavior. Yet the administration’s plan for rescuing the banking sector involves generous inducements, big subsidies and the opportunity for wealthy investors to become much wealthier while assuming very little risk. There are reasons for structuring the bank bailout this way, and there are reasons to take a get-tough attitude with the auto companies. But the juxtaposition is galling — and, for many autoworkers, potentially devastating.

Detroit Dissonance

So where is the fairness in treatment? Where is the justice?

Maybe I’m missing something?

Proof Senate Republicans are douchebags and hate America

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Late last night Republicans in the US Senate killed a bill that would provide a bridge loan to US automakers to prevent their collapse. What did they want in exchange for their vote? They wanted the UAW to make concessions on wages so that they make as much as workers in non-union foreign car plants that happened to be in the states many of the douchebags represent. How convenient.

Why do the Republicans hate America?

If the automakers fail next comes the suppliers then the suppliers of the suppliers and after any business dependant on car makers for their lively hood. You will see millions put out of work just so GOP douchebags can break a union.

Classy!!!

What ticks me off more is the GOP douchebags never demanded wage concessions from Wall Street when they voted to give it $700 Billion.

Here is a list of Senators who voted for the Wall Street plan but voted against the automaker plan:

Bob Bennett, R-UT
Richard Burr, R-NC
Saxby Chambliss, R-GA
Tom Coburn, R-OK
Norm Coleman, R-MN
Bob Corker, R-TN
John Ensign, R-NV
Chuck Grassley, R-IA
Judd Gregg, R-NH
Orrin Hatch, R-UT
Kay Bailey Hutchison, R-TX
Johnny Isakson, R-GA
John Kyl, R-AZ
Mel Martinez, R-FL
John McCain, R-AZ
Mitch McConnell, R-KY
Lisa Murkowski, R-AK
John Thune, R-SD

Also note that Corker and McConnell have foreign owned car plants in their state so we know why they want to kill US automakers.

Job killing douchebags, every last one of them.

*Update* The douchebags even wrote out their plans to bust the union in a freaking memo!!!!